Homeowners Associations-- A Short History

When you buy a house in a new subdivision or planned unit development, you may be subject to a host of rules and regulations! Are you shocked yet? I know many of you are, because I get more complaints about the dreaded words "Homeowners Association" or the HOA! I have noticed that there is a typical pattern that HOA's tend to follow over the years.

It starts with the village stepping in to beat up the developer, because of homeowner complaints. The developer runs the HOA until a certain percentage of occupancy is met. Then usually because the village forced the developer to turn over the HOA to the residents the problems and complaints shift to the new "resident board". Usually the first thing that happens is the new HOA board decides the old management company (usually a creature of the developer) needs to take a long walk off a short pier. Then the board goes through a shake out and some energetic resident leadership takes over and things tend to smooth out and normalcy returns.

Some of the things you will look for from your HOA are:

• Maintenance: Once a developer'’s responsibility has expired, the owners have to pay for repairs when things start to break down. Having an adequate reserve and a planned maintenance program is essential to preserving the community and your property'’s value.
• Fees and Assessments: Generally, homeowners associations levy mandatory monthly fees to maintain common property, such as lawns, swimming pools, hiking trails, golf courses, or tennis courts Fees may increase as expenses rise and special assessments may also be imposed for major costs such as a new roof for a community sports center or private street repair.
• Liens and foreclosures: If you fail to pay your association dues, or run afoul of its regulations, you can be charged a fine. A lien can even be imposed on your property resulting in potential foreclosure, sometimes over trivial amounts. If you dispute the charges in court and lose, you may also have to pay the association'’s legal fees.
• Governance: Most homeowners association board members are volunteers elected by the property owners. Sometimes inexperience can cause mistakes, resulting in additional expenses. Often, more than 50 percent of the dues collected by an association are used to pay for the management companies and attorneys it employs.
• Regulations: Together with their management partners, homeowners associations function very much as private governments. Once property owners sign a contract agreeing to comply with an association'’s laws, that often supersedes their individual property rights. It'’s not easy to change community regulations imposed by a homeowners association. To do so generally requires the approval of the majority of members.

My mayoral radar tells me this will be a lively debate on the comment section of my blog so I promise to blog further on the subject since I am sure I will get some ideas from the feedback. A couple of interesting facts on HOA's are that they are:

• The fastest growing form of government in the US in the last 15 years.
• 1 in 6 Americans live in a HOA environment.
• There are at least 20 HOA's in Round Lake.
• The Village has taken over one HOA, Bright Meadows! By the way the residents requested it.

By the way this is an article from a few months ago, but I am pressed for time this morning.